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Top bankers warn of damage to City from renegotiation of EU-UK ties

The UK government’s plans to press for a renegotiation of the country’s relationship with the European Union could result in a backlash from France and Germany that could harm the City of London, senior bankers have warned chancellor George Osborne.

Speaking anonymously, the London-based head of an international bank voiced “worries” over the potential “ramifications” for the UK financial services sector, in the event of the nation moving away farther from the core of Europe.

Meanwhile, Lord Heseltine, who authored a report commissioned by UK prime minister David Cameron last year on how to foster domestic economic growth, has warned that the Tory leader’s desire to renegotiate the country’s EU membership and put the outcome to a referendum could drive away inward investment and spell policy uncertainty for years.

Describing himself unashamedly as “pro-European”, the 79-year-old peer told the Financial Times that the UK’s future in the bloc was unpredictable due to the “high complexity” of the issues in any referendum. Any such campaign would be held against “a barrage of propaganda”, the former deputy premier argued, saying this could inadvertently lead to the UK quitting the EU altogether.